What should a foreign buyer do if property purchase funds are frozen before closing in Turkey? Learn how to protect the deposit, postpone title transfer, document the source of funds, challenge account restrictions and preserve contractual rights.

A foreign buyer preparing to purchase property in Turkey can face a serious problem if the purchase funds are suddenly frozen, suspended or made unavailable shortly before title transfer.

The immediate concern is usually the property transaction: Will the buyer lose the property, deposit or contractual rights because payment cannot be completed?

However, the buyer must address two separate legal problems at the same time:

1. Why are the funds unavailable, and how can the financial restriction be resolved?
2. How can the property purchase be protected while the banking problem is being resolved?

Foreign buyers should not assume that every restriction described by a bank as a “MASAK issue” has the same legal basis. Under Turkey’s anti-money-laundering framework, suspicious transactions can be reported, and certain transactions may be temporarily postponed. Law No. 5549 provides for postponement for up to seven working days under its specific transaction-postponement mechanism. A separate judicial or prosecutorial asset measure can create a different and potentially longer restriction.

First Priority: Do Not Complete the Property Closing Blindly

If the buyer cannot access the purchase funds, the closing strategy should be reconsidered immediately.

The buyer should avoid:

• Signing documents confirming payment that has not actually occurred;
• Creating artificial payment records;
• Borrowing money from unexplained third parties simply to complete closing;
• Making cash arrangements designed to bypass banking controls;
• Transferring funds through unrelated individuals;
• Signing a cancellation or deposit-forfeiture document without legal review.

The objective should be to preserve both the legitimate property transaction and the buyer’s position concerning the frozen money.

1. Determine Exactly Why the Money Is Frozen

The buyer should first establish whether the problem involves:

• Internal bank compliance;
• Additional customer due diligence;
• A suspicious transaction review;
• Temporary postponement of the transaction;
• A MASAK-related process;
• A prosecutor’s investigation;
• A judicial seizure order;
• Another statutory restriction.

This distinction is essential because the bank may not have authority to release funds if it is implementing a binding official decision.

2. Do Not Assume a Seven-Working-Day Rule Solves Every Freeze

Law No. 5549 permits the postponement of a transaction for up to seven working days where assets involved are suspected of being connected with money laundering or terrorist financing and the statutory conditions are satisfied. The implementing regulation similarly provides a seven-working-day framework for this particular mechanism.

But this does not mean every frozen account must become available after seven working days.

A later seizure or other legally distinct measure may continue beyond that period.

The buyer therefore needs to identify the exact legal basis rather than simply waiting seven working days.

3. Notify the Seller Immediately

If closing cannot occur because the buyer’s funds are unexpectedly unavailable, the seller should normally be notified promptly.

The communication should be carefully drafted.

It may explain that:

• Funds are temporarily inaccessible;
• The buyer remains willing to complete the transaction;
• The buyer is investigating the restriction;
• Additional time is requested;
• The buyer does not waive contractual rights.

The wording is particularly important where the contract contains strict closing deadlines.

4. Review the Property Purchase Agreement

The contract should be reviewed immediately for provisions concerning:

• Closing date;
• Payment deadlines;
• Buyer’s default;
• Seller’s termination rights;
• Deposit forfeiture;
• Penalty clauses;
• Extension rights;
• Force majeure;
• Notice requirements;
• Cure periods;
• Refund provisions.

A banking restriction does not automatically suspend every contractual deadline.

Therefore, the property contract and the financial investigation must be handled simultaneously.

5. Protect the Deposit

Foreign buyers are often most concerned about losing a substantial reservation payment or deposit.

Whether the seller can retain the deposit depends on matters such as:

• Nature of the payment;
• Contract wording;
• Reason closing failed;
• Whether the buyer is legally in default;
• Whether an extension was requested;
• Seller’s own compliance with the agreement;
• Applicable mandatory legal rules.

The buyer should not automatically accept a seller’s statement that “the deposit is now forfeited.”

6. Request a Written Closing Extension

Where appropriate, the buyer and seller can agree to postpone closing.

The extension should preferably state:

• New closing deadline;
• Status of the existing deposit;
• Whether penalties are suspended;
• Whether the seller can market the property to another buyer;
• Whether the purchase price remains unchanged;
• What happens if the restriction continues.

A written amendment can substantially reduce uncertainty.

7. Avoid Open-Ended Extensions

The buyer also needs protection.

An extension should not leave the buyer indefinitely obligated to purchase property while the financial investigation remains unresolved.

A carefully drafted arrangement may establish:

• Initial extension period;
• Further extension mechanism;
• Long-stop date;
• Refund rights;
• Consequences if funds remain legally inaccessible.

8. Identify the Exact Transaction That Triggered the Problem

The buyer should ask:

Which transfer is being questioned?

For example:

• Money entering Turkey;
• Currency conversion;
• Transfer from a company account;
• Transfer from a family member;
• Transfer from an offshore company;
• Cryptocurrency conversion;
• Sale proceeds from foreign property;
• Transfer to the seller.

The answer determines which evidence should be prepared.

9. Prepare a Source-of-Funds File Immediately

Turkey’s anti-money-laundering framework requires obliged entities to identify customers and take applicable customer-due-diligence measures. It also requires suspicious transaction reporting where there is information, suspicion or reasonable grounds for suspicion concerning unlawful origin or use of assets.

A foreign property buyer should therefore prepare a coherent source-of-funds file rather than merely telling the bank that the money is legitimate.

10. Property Sale Proceeds From Abroad

If the Turkish property purchase is funded through sale of another property abroad, preserve:

• Foreign title record;
• Sale agreement;
• Closing documents;
• Buyer’s payment;
• Tax documentation;
• Foreign bank statement;
• International transfer record.

The evidence should establish:

Foreign property → legitimate sale → buyer’s payment → investor’s bank → transfer to Turkey.

11. Business Sale Proceeds

Where the investor sold a company or shares, useful documents may include:

• Share purchase agreement;
• Evidence of previous ownership;
• Closing statement;
• Corporate documents;
• Buyer payment;
• Tax documentation;
• Bank statements.

The transfer should be traceable from the corporate transaction to the Turkish property purchase.

12. Business Income and Dividends

If the purchase is funded through accumulated business wealth, preserve:

• Financial statements;
• Tax returns;
• Dividend resolutions;
• Shareholder records;
• Company bank records;
• Personal bank records.

A bank statement showing a large balance may not by itself explain how the wealth was generated.

13. Inheritance Funds

Inheritance can be established through documents such as:

• Certificate of inheritance;
• Probate documents;
• Will;
• Court records;
• Estate distribution records;
• Bank statements.

The documentary chain should show how inherited funds eventually reached the buyer’s account.

14. Family Gifts

A foreign buyer receiving purchase funds from parents or another family member should document the transaction carefully.

Evidence may include:

• Gift documentation;
• Family relationship;
• Donor’s bank statement;
• Transfer record;
• Donor’s source of funds.

For substantial gifts, explaining only that “my father sent the money” may not answer source-of-funds questions.

15. Loans

If the purchase money comes from financing, preserve:

• Loan agreement;
• Lender information;
• Disbursement record;
• Repayment schedule;
• Security documents;
• Bank statements.

Private loans may require additional evidence showing the lender’s financial capacity and legitimate source of money.

16. Cryptocurrency Proceeds

Property purchases funded through digital-asset profits can require a particularly detailed transaction history.

Evidence may include:

• Exchange records;
• Wallet history;
• Original fiat deposits;
• Purchase records;
• Trading history;
• Conversion records;
• Withdrawal records;
• Bank statements.

The objective is to trace the money from its original legitimate source into the final fiat funds intended for the property acquisition.

17. Prepare a Complete Banking Trail

The buyer should reconstruct every material step.

For example:

Business income → Foreign Bank A → Investment Account B → Foreign Bank C → Turkish Bank → Property Seller

Statements should ideally support each stage.

Unexplained gaps can create additional compliance questions.

18. Explain Why the Money Was Sent to Turkey

The economic purpose should be clear.

A useful file may contain:

• Property purchase agreement;
• Seller information;
• Title details;
• Valuation documents;
• Deposit receipt;
• Closing schedule;
• Correspondence with the seller.

These documents help establish that the transfer has an identifiable investment purpose.

19. Do Not Create Documents After the Freeze to Invent a Transaction

Never attempt to solve a banking problem through:

• Backdated loan agreements;
• Fake gift documents;
• False invoices;
• Altered bank statements;
• Fictitious consultancy agreements;
• False property documents.

The original compliance issue may be manageable.

False evidence can create substantially more serious legal exposure.

20. Check Whether Only the Property Funds Are Restricted

The buyer should establish whether:

• One transfer is suspended;
• A defined amount is restricted;
• The entire account is inaccessible;
• Multiple accounts are affected.

This distinction can influence the legal strategy.

21. Consider Requesting Partial Release

If only part of the account relates to the questioned transaction, it may be appropriate to examine whether unrelated funds can be released.

For example:

Amount questioned: USD 100,000
Account balance: USD 700,000
Property price: USD 500,000

If USD 600,000 can be independently documented as legitimate and unrelated to the questioned transaction, the buyer may consider whether the applicable procedure permits limitation of the restriction.

Partial release is not automatic and depends on the underlying legal measure.

22. Can the Buyer Ask for Funds to Be Released Directly for Closing?

This may be worth examining in an appropriate case.

Rather than requesting unrestricted access to all funds, the investor might seek permission for a specifically documented transaction.

For example:

Buyer account → identified seller → identified property → documented purchase price.

Whether such a controlled release is legally available depends on the authority responsible for the restriction.

23. Should the Buyer Use Another Account?

Only if the alternative funds are legitimate and their use does not circumvent an existing legal restriction.

There is an important difference between:

legitimately using independent, unrestricted funds

and

moving money through other accounts to defeat an official asset restriction.

The second approach can create serious problems.

24. Can a Family Member Pay the Seller Instead?

This should not be done casually.

A third-party payment can create additional questions involving:

• Source of funds;
• Beneficial ownership;
• Contractual payment;
• Property acquisition;
• Tax and accounting consequences;
• Citizenship-by-investment eligibility, where relevant.

If third-party funding is contemplated, it should be legally reviewed before payment.

25. What If the Property Is Being Purchased for Turkish Citizenship?

The situation requires even greater caution.

The investor should not improvise an alternative payment route simply to preserve the closing date.

Citizenship-related property transactions involve additional requirements concerning:

• Qualifying investment value;
• Banking documentation;
• Payment evidence;
• Title procedures;
• Investment documentation;
• Required holding commitments.

A payment structure that allows an ordinary property sale to close may not necessarily satisfy citizenship-investment requirements.

26. Should a Citizenship Investor Delay Closing?

If compliant payment cannot be completed, delaying closing can be safer than creating a defective citizenship transaction.

The investor should preserve:

• Property eligibility;
• Purchase agreement;
• Deposit;
• Valuation;
• Seller cooperation;
• Citizenship documentation.

The transaction can then proceed once the banking issue is legally resolved, where circumstances permit.

27. What If the Seller Threatens to Sell the Property to Someone Else?

Review the contract immediately.

The buyer may need to consider:

• Whether the seller has termination rights;
• Whether a cure period applies;
• Whether the contract remains binding;
• Whether an extension can be negotiated;
• Whether interim legal protection is available in the particular dispute.

The buyer should preserve all correspondence demonstrating continued willingness to perform.

28. What If the Seller Refuses to Return the Deposit?

The legal characterization of the payment becomes critical.

The buyer should preserve:

• Contract;
• Deposit receipt;
• Bank transfer;
• Seller correspondence;
• Evidence of the account restriction;
• Closing communications.

A separate contractual claim may arise if the transaction ultimately cannot proceed and the seller improperly retains funds.

29. Can the Buyer Claim the Bank Freeze Was Beyond Their Control?

Potentially, but this does not automatically eliminate contractual liability.

Whether the banking restriction excuses non-performance depends on the contract and circumstances.

The buyer should avoid assuming that a financial investigation automatically constitutes force majeure.

30. What If the Seller Caused the Banking Problem?

This creates a very different situation.

For example, concerns may arise because:

• Seller account is under investigation;
• Seller is connected to suspicious transactions;
• Payment instructions suddenly changed;
• A third party was substituted as beneficiary;
• Seller ownership information is inconsistent.

The buyer should stop and reassess the transaction before sending additional money.

31. Could the Freeze Be Protecting the Buyer From Fraud?

Potentially.

A blocked payment should not always be treated merely as an obstacle.

If banking scrutiny reveals irregularities involving:

• Seller identity;
• Beneficiary account;
• Fraudulent instructions;
• Compromised email;
• Fake power of attorney;
• Unrelated payment recipient;

the restriction may have prevented a substantial loss.

Verify the transaction before attempting payment again.

32. Check the Seller’s Bank Details Again

Before any future transfer, independently verify:

• Account holder;
• Bank;
• Account details;
• Relationship to seller;
• Reason for any change in payment instructions.

Never rely solely on an unexpected email instructing the buyer to send the purchase price to a new account.

33. What If Closing Is Scheduled Within 24 or 48 Hours?

Act immediately.

The buyer should:

1. Notify the seller;
2. Request postponement;
3. Preserve the deposit position;
4. Contact the bank through formal channels;
5. Identify the restriction;
6. Collect source-of-funds evidence;
7. Avoid artificial alternative transfers;
8. Review contractual default provisions.

Waiting until the closing deadline has expired can weaken the buyer’s contractual position.

34. What If the Bank Will Not Explain the Freeze?

The bank may face legal restrictions concerning disclosure of suspicious transaction reporting. Under Law No. 5549, obliged entities generally cannot disclose to transaction parties that a suspicious transaction report has been submitted.

Therefore, limited information from the bank does not necessarily mean that no official process exists.

The buyer may need to determine the legal position through the appropriate procedural channels.

35. Can the Buyer Challenge a Judicial Freeze?

Potentially.

If the funds are subject to a prosecutor- or court-related measure, the investor should identify the underlying investigation and examine available procedural remedies.

Potential arguments may involve:

• Legitimate source of funds;
• Lack of connection with alleged criminal activity;
• Good-faith ownership;
• Excessive scope;
• Continued necessity;
• Proportionality;
• Availability of a narrower measure.

The exact remedy depends on the decision involved.

36. Can the Buyer Request Full Release and Partial Release Alternatively?

Depending on the procedural situation, this may be a useful strategy.

The investor might argue:

Primary request: The funds are legitimate and the restriction should be removed.

Alternative request: If some restriction is considered necessary, it should be limited to the questioned amount and the remaining funds should be released.

The request should be supported by fund-tracing evidence.

37. What If the Restriction Lasts Longer Than Expected?

Do not allow the property contract to remain unmanaged.

If the restriction continues:

• Extend closing where appropriate;
• Renegotiate the long-stop date;
• Protect refund rights;
• Monitor seller obligations;
• Continue challenging the financial restriction;
• Consider whether the transaction should eventually be terminated.

The property strategy should evolve with the financial investigation.

38. Should the Buyer Keep Evidence of Losses?

Yes.

Preserve evidence of:

• Lost deposit;
• Contractual penalties;
• Additional accommodation costs;
• Financing costs;
• Currency losses;
• Legal expenses where relevant;
• Additional property costs;
• Lost commercial opportunities.

Whether any of these losses can ultimately be recovered depends on the legal basis and responsible party.

39. 2026 Emergency Checklist Before Property Closing

A foreign buyer whose funds become frozen shortly before closing should immediately check:

Banking

• Which account is affected?
• What amount is unavailable?
• When did the restriction begin?
• Who imposed it?
• Is there an official decision?

Source of Funds

• Where did the money originate?
• Can the complete banking trail be shown?
• Are tax and transaction records available?

Property

• When is closing?
• Has a deposit been paid?
• Can closing be extended?
• Can the seller terminate?
• Can the deposit be retained?

Alternative Funds

• Are independent legitimate funds available?
• Would using them violate or circumvent the restriction?
• Would alternative payment affect citizenship eligibility?

Legal Strategy

• Can the restriction be challenged?
• Can partial release be requested?
• Can unrelated funds be released?
• Can a controlled payment be requested?

40. The Most Important Rule: Protect Both Transactions

A foreign buyer should avoid focusing exclusively on the frozen bank account.

There are two parallel matters:

Financial Investigation

Protect the funds, explain their legitimate origin and challenge the restriction where legally appropriate.

Property Transaction

Protect the deposit, closing rights, contractual position and intended acquisition.

Solving one while ignoring the other can still result in substantial financial loss.

Frequently Asked Questions

1. Can a foreign buyer lose a property because the purchase funds are frozen?

Potentially, particularly where a contractual closing deadline is missed. The purchase agreement should be reviewed immediately and an extension considered.

2. Does a MASAK-related restriction always disappear after seven working days?

No. The seven-working-day period applies to the specific transaction-postponement mechanism under Law No. 5549. A separate judicial or prosecutorial measure may operate differently.

3. Can the buyer ask the seller to postpone closing?

Yes, the parties may potentially agree to amend the closing date. The amendment should preferably be documented in writing.

4. Can the seller automatically keep the deposit?

Not necessarily. The answer depends on the contract, legal nature of the payment, circumstances causing non-completion and applicable law.

5. Can the buyer use money from another bank account?

Potentially, if the funds are independently legitimate and their use does not circumvent an existing legal restriction. Citizenship-related purchases require additional review.

6. Can the buyer request partial release of frozen funds?

Potentially. Availability depends on the legal basis of the restriction, the amount under investigation and whether unrelated funds can be identified.

7. What is the best evidence that property purchase money is legitimate?

A complete chain showing the original source, ownership of the money, banking movement and intended property purchase is generally the strongest approach.

8. Should the buyer make a cash payment to save the transaction?

A buyer should not attempt to circumvent banking or official restrictions through artificial cash or third-party payment arrangements.

9. What if the purchase is for Turkish citizenship?

Additional caution is required because payment and investment documentation can affect citizenship eligibility. An alternative payment structure should be reviewed before it is used.

10. What should the buyer do first?

Identify the legal source of the banking restriction and simultaneously protect the contractual closing deadline and deposit.

Client-Focused Legal Support for Frozen Property Purchase Funds

A bank restriction immediately before a Turkish property closing can place a foreign buyer under significant time pressure.

The safest response is generally not to improvise a new payment structure. Instead, the buyer should identify the legal basis of the restriction, preserve the property contract, seek additional closing time where appropriate and prepare a complete source-of-funds file.

Where the restriction is broader than necessary, legal remedies may potentially be considered to seek complete removal, limitation of the frozen amount or release of demonstrably unrelated funds.

Where the property is intended for Turkish citizenship, the payment solution should also be reviewed from the citizenship perspective before the transaction proceeds.

Fırat Fesih Kaya Law Office assists foreign buyers and investors with frozen property purchase funds, source-of-funds disputes, MASAK-related investigations, real estate transactions, deposit disputes, title transfers and citizenship-by-investment matters in Turkey.

Lawyer Fırat Fesih Kaya provides legal assistance in coordinating the banking and property aspects of urgent transactions, protecting contractual rights and preparing documentary evidence concerning the legitimate origin of investment funds.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey

This article is intended for general information and does not constitute legal advice. The appropriate response depends on the property contract, source of the banking restriction, transaction structure, source of funds and any judicial or administrative measures affecting the money.